TMI Blog2005 (5) TMI 666X X X X Extracts X X X X X X X X Extracts X X X X ..... s primarily against respondents No. 3 and 4. What is alleged is that one and only unencumbered asset of the company, i.e H-3, Block B-1, Mohan Cooperative Industrial Estate, New Delhi-44 (hereinafter referred to as the 'property in question'') has been transferred/disposed of by respondent No. 3 (the then Director of the company) to respondent No. 4, who is wife of respondent No. 3 and this transfer has taken place by virtue of on Agreement to Sell dated 1st October 1999 for a consideration ofRs.47,00,000/-. The applicant states that it is a fraudulent transfer and is hit by Section 531A of the Act and the transfer of the property took place for an inadequate consideration ofRs.47,00,000/- as against the actual market value of the property being ₹ 5,00,00,000/-. Therefore, the prayer made is to declare the said Agreement to Seal dated 1st October 1999 as void and direct the respondent No. 4 to restore the property in question, to the company. Some incidental prayers are also made. 3. CA No. 1084/2000 is filed by Steel Tubes of India Ltd, which is another secured creditor. Allegations and prayer made in this application are identical as in CA No. 555/2000. 4. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oid against the liquidator as prerequisites of Section 531A of the Act were also not fulfillled. 5. In the reply filed by the respondents No. 3 and 4 to these applications they have emphasised that although the Agreement to Sell is dated 1st October 1999, the transaction of transfer took place much earlier and in fact, the Agreement to Sell dated 26th June 1996 was executed between the company and Smt. Ketaki Sood and a sum of ₹ 5,00,000/- was paid as initial advance while entering into said Agreement to Sell dated 26th June 1996. On the same day General Power of Attorney was also executed in favor of the respondent No. 3 by Eurobike authorising him to do all acts, things, deeds and actions whatsoever in respect of the property in question. Remaining payments of ₹ 38,55,200/- were also made on 31st March 1998, 27th July 1998 and 28th July 1998. After deducting a sum of ₹ 2,44,800/-, which was owed by the company to the respondents No. 3 and 4. The circumstances in which fresh Agreement to Sell dated 1st October 1999 was executed are stated in the reply. According to the respondents, the transaction was conceived way back in the year 1996. The respondents have s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y formed merged company. Two new directors joined the company i.e. Smt. Rita Jain (proprietor of Cezario), as Promotor-Director and Ms. Roma Trikha (Director, P.R.O. and looking after General Administration). There were other Directors also and Mr. L.N. Sood was one of them, but merely a Non-Working Director. (d) On 19th February 1996 Rupayan changed its name to Eurobike, which change of name was approved by the Registrar of Companies. The Board of Directors of Eurobike unanimously decided in a Board Meeting on 23rd April 1996 that the subject property be sold to Smt. Ketaki Sood, proprietor of Rupayan who had by then resigned from the company. This Resolution in effect, confirmed the resolution dated 10th October 1994 passed by the original Rupayan before the merger. In this meeting, Smt. Rita Jain informed the Board that the fair market value of the property in question in view of the fact that there are two floors in possession of the tenants, was assessed at ₹ 46,00,000/- The Board by this meeting, resolved to hand over vacant, quiet and peaceful physical possession of the property in question to Smt. Ketaki Sood and to enter into an Agreement to Sell to her on receipt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k and Co., Chartered Accountants on 31st August 1998. 6. It is accordingly sought to contend that much before filing of the petition, which was filed on 1st September 1999, transaction in question took place which has genesis in Agreement to Sell dated 26th June 1996 and even the entire payments were made by 28th July 1998. Winding-up petition was filed more than a year after the transaction was completed. It is further stated that from the history of incorporation of Rupayan and its merger with Cezario and the intention of Smt. Ketaki Sood to continue the furniture business while resigning from the Board of Directors in 1995, would clearly show that she wanted to continue to do furniture business from the property in question and it is because of this reason the company agreed to sell this property to her. In fact, according to the respondents, it was a loose arrangement as per which, she was given the subject property and the new management with induction of Smt. Rita Jain heading Cezario, the company retained other property at Noida. In 1996, therefore, Agreement to Sell was entered into and even the entire consideration was paid. The consideration of ₹ 46,00,000/-, in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tants of the company certifying that the company has received entire sale consideration of ₹ 46,00,000/-; letter dated 27th December 1996 allegedly written by the respondent No. 4/Ketaki Sood to Eurobike calling upon the company to extend the time for payment of alleged balance sale consideration; letter dated 3rd February 1997 allegedly written by the company to Smt. Ketaki Sood purporting to extend the time. It is also contended that these documents are created in order to give a semblance of the alleged transaction taking place in 1996. Further an attempt is made to relate certain payments of 1998 i.e. more than two years after the agreement with the purported Agreement to Sell even when such payments had otherwise no nexus or connection with the purported Agreement to Sell. It is contended that the respondent No. 4 was earlier a director of the company and even after ceasing to be director had some business dealing and the respondent No. 3 continued to be the director of the company. These payments made in some other connection are tried to be sought to be connected with fake transaction of the year 1996. Even when these payments fell short of approximately ₹ 2,00,0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hered from the Power of Attorney itself. This would give credence to the version of the respondents that the Agreement to Sell was executed in the year 1996. B) Most important aspect is the attornment of tenants in favor of Smt. Ketaki Sood. This attornment was in September 1998. It is the case of the respondents No. 3 and 4 that after paying full consideration in September 1998, they asked the company to give possession. Be as it may, letters are produced on record, which were written to the tenants (one letter was written by the company to the tenants asking them to pay the rent to Smt. Ketaki Sood henceforth and other letters are written by the said tenants agreeing to do the same. This correspondence is not between the company and its directors or Ketaki Sood. This correspondence is with outsiders, namely, the two tenants. C) More than this, there is another significant aspect which, in fact, by itself clinches the entire issues, namely, the two tenants started paying rents to Ketaki Sood with effect from September 1998. These rents are paid by means of cheques. Affidavit of tenants is also filed confirming their attornment in favor of Ketaki Sood. If sale transaction was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L.N. Sood is Power of Attorney holder of Eurobike in continuation of the Agreement to Sell of 1996 and Power of Attorney of 1996 executed a registered sale deed. According to the respondents, therefore, the Agreement to Sell dated 15th July 1999 is nothing but extension and reiteration of the 1996 Agreement. The respondents have also expressed that the amount of ₹ 45,00,000/- mentioned in the Agreement to Sell dated 15th July 1999, which was received by means of three cheques of ₹ 15,00,000/- each was returned immediately vide cheques dated 8th June 1999, 14th June 1999 and 17th June 1999 for ₹ 15,00,000/- each. Although motive of writing such an agreement is not fully appreciated, in view of other circumstances weighing in favor of the respondents, explanation given by the respondents seems to be plausible. 10. In the facts of this case the transaction would not come under the mischief of Section 531A of the Act, which can be treated as a void transfer as against the Liquidator. It appears that as Smt. Kataki Sood wanted to continue the furniture business from the premises in question, on her resignation as Director after the merger of Cezario with the company ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
